The last foreclosure auction I went to had two bidders there. How do you know how much to spend? Here is a (genuine) listing sample. I'll start with this one, in order to show you how to find a property in another state, then switch to a local property to show how much fun these drive bys can be. Read this first listing, then let's go on from there. SINGLE FAMILY HOME ON 50± ACRES Total Living Space: 2,842± sq.ft. ================== Okay, we've found a property that interests us. Do we want it? How do you find out WHERE the property is, what the area looks like, what the region offers in the way of jobs and Internet service? Since I look for property all over the country rather constantly I keep the tools of my trade handy, on the web, and you are welcome to use them too. So, first thing, let's go to http://www.talewins.com/Search.htm There are about 100 different search engines listed on this page. We're going to click on Google first, and we are going to type in the words, "BASALT COLORADO". Google chugs away and brings up several links for us to study. The one I chose is: http://www.basalt.com/ Bingo. ALL the information I could ask for concerning this region is available from this one page! Here I find weather, activities, chambers, area maps, city maps, malls, road and travel conditions, Internet services, and the library, all the necessities of life. Now, a fall back resource for maps is to go to yahoo, and click on MAPS. Type in the address and away you go. If there is NO standard address (and many properties don't have one) you will need to acquire the knowledge of reading metes and bounds. Your librarian can help you there, although the book HOW TO BUY LAND AT TAX SALES is the best source I know of. It is available from http://www.talewins.com/rs002.htm Drive bys are your best kind of inspectionA good friend (James by name) was so wound up about his recent successes that we could not get a word in edgewise to brag about our own adventures. "I just got paid $16,000 for buying a $70,000 home." James has bought 116 homes this way so that was not a surprising development.
At that point he began to wax enthusiastic about the other properties available right now in Pulaski County and how much information he could get on them. My interest was piqued immediately as Pulaski County is where I learned the real estate business. I had not been able to get all that information four years ago. When he said there was another auction going on the next day I could resist no longer, and invited myself along. "Well, GOOD," he responded. "Then I can show you the OTHER properties I'm looking at right now." And that's the way it went down. First, we went to the local county tax office and James showed me all the computerized information now available. "All you have to do is type in the address of the property and the computer does the rest." Owners, liens, square footage, rooms, number of floors, date built flashed up for every property. What a God-Send. We could even see at one glance how old the roofs were. No, you can't click up that much information at your poor county courthouses, but that is the wave of the future. We did drive-bys on two properties with regular street addresses which he was interested in. What do you look for in a drive by?
When there are no occupants listed, and if the occupants are definitely moved out, surveying the property on foot is definitely fun. Look in the windows, look in the backyard, look for property lines, look for work that has to be done, look for changes you can make to create a more valuable property. For example, a new door with an oval glass window in it could improve the value of the house dramatically.
Marleen just happened to be close to the garage door when he spoke. She reached down and tugged. It came up. "How much would you give to see the inside?" she asked. "That's just the garage," he said. By the time he got to the garage door Marleen had twisted the door knob leading inside. It opened. By the time he got to that door she had opened the main door to the home and gone inside. James beat her inside the kitchen though. Where was I during this exciting race? Just like you should have been, I hope, firmly entrenched OUTSIDE. I was standing stone still, listening for wailing sirens. After five minutes I followed them inside, still listening for sirens, and wondering how soon we would go to jail for breaking and entering. "We didn't do any breaking," Marleen explained. "We only entered." For some reason I seemed to miss the finer points of the law. The owner had ever so conveniently left the wad of keys to the house on the table for the bank in Boston. They were not needed. Every door in the house was unlocked. James and Marleen wandered upstairs. I went outside and waited for the sirens. As an evasive tactic I walked all around the house and took pictures of the surrounding area too. Perhaps if the police arrived I could convince them I was there all by myself and I would be the only one that went to jail if they did not look inside. Fat chance! Forlorn hope. Just then, a siren did begin wailing our way and it took all my courage to stand my ground. After an eternity of stress and two gallons of sweat ripped from my back, James and Marleen came forth healthier than Lazarus had ever been. They began to fill me in on all the amazing details of the house I had missed out on seeing. They described the brick floors on the bottom level, and the hardwood upper floors, and the oil paintings of fairy tales. There is definitely nothing wrong with studying the inside of the house; The more you know about the value of the property, the better you can bid on it at the auction. I simply suggest that the police will be happier if you have written permission, or better yet, a live guide.
Anyway, this house is appraised at $300,000, but the appraiser completely missed the top floor. That happens far more often than anyone outside the trade suspects. James says he can go all the way up to $200,000 to get it. the end postscript: one week later the auction came up for this project. Only five other people showed up. The opening bid was $168,563.28 James bid $1. more. Nobody bid against him and James won it! If he sells the house for $300,000 he will have made $130,000 profit for a few days of work. If (as he plans) he keeps the house for his own use, depreciation will give him the full amount in depreciation, as a tax write off. PostScript: Three years later... Using his fairy tale house as a base of operations James has purchased numerous more properties, including 1103 acres in Northern Arkansas with four miles of river running through it. That ranch has doubled in appraised value since he bought it, and he bought it for much less than the initially appraised value. And now, one more year later, they have just found natural gas on the property and it is worth millions. Luck of the Irish, I call it. Would you like to get advance notice of these auctions? The best source I've found is foreclosureworld.com. There are many other auction notice companies which are quite good. I have the best ones I know of listed at http://www.talewins.com/fdic3.htm Lin Stone is the author of HOW TO BUY LAND AT TAX SALES, published by Truman Publishing. Anyone into buying real estate (regardless of strategy) will find the information |
